Ben Bernanke Sees ‘Stagflation’ Ahead
The former chairman of the Federal Reserve has a new book out on Tuesday explaining the powers of the Fed and Congress to juice or slow our economy amid a supply-chain crunch and sky-high demand.
Standing in his kitchen one morning in Washington, D.C., and drinking a glass of lightly flavored water, Ben Bernanke is wearing a gray suit, a button-down shirt, no tie and a pair of Brooks running sneakers. He looks a far cry from his time at the Federal Reserve, where he presided as chairman for eight years during what was — until recently — considered the most precarious financial moment of the past half-century.
But the coronavirus pandemic and its economic impact — the overnight pullback in employment coupled with an infusion of money not seen in history and now, seemingly, runaway inflation — have had Mr. Bernanke thinking. And writing. Mr. Bernanke has been in a self-imposed quarantine of sorts writing a book, “21st Century Monetary Policy: The Federal Reserve From the Great Inflation to Covid-19,” which will be published on Tuesday.
Mr. Bernanke describes the book as “academic,” but at this particular moment, it may be a uniquely practical book as the public tries to better understand the powers of the Federal Reserve and Congress to juice or slow our economy amid a supply-chain crunch and sky-high demand. The former chairman’s book itself is an example of the crosscurrents playing out in our economy: “Given supply-chain disruptions, this book took six months to go from final manuscript to appearing in the store,” he said.
Mr. Bernanke, who wrote the book “when it became evident that I was not going to be traveling a lot and that we were home for a while” amid the early days of the pandemic, provides a history of the Federal Reserve — his own graduate thesis was on the crash of 1929 and its aftermath, which he says provided valuable lessons for how he responded to the recession in 2008. His focus this time, however, is not on 2008 but on how the Federal Reserve has reacted to various economic scenarios over more than a century, touring readers though the reins of different Fed chairs like Alan Greenspan. Readers will very likely be particularly focused on Mr. Bernanke’s analysis of the 1970s, which may be the closest analogue to what’s happening in today’s economy.